Tea Party Nation's Job Plan

Melissa Brookstone recently called on America’s small business owners to take the following pledge:

I, an American small business owner, part of the class that produces the vast majority of real, wealth producing jobs in this country, hereby resolve that I will not hire a single person until this war against business and my country is stopped.

This does, obviously enough, raise some interesting moral concerns.

On the face of it, urging small business to simply stop hiring during a period of significant unemployment would seem to be an immoral action. After all,if a small business owner had intended to hire someone and then decided not to on this basis, it is rather likely that someone who needed a job rather badly would remain unemployed through no fault of their own. Naturally, some might point out that some people who would have been hired might not actually need the job, but it seems rather likely that if this pledge is taken seriously it would affect people who do, in fact need jobs.

One obvious reply is that small business owners have the right to hire or not hire as they will. If a small business owner elects to not hire people on the basis of Brookstone’s pledge, then they are acting within their moral rights. After all, they are under no moral compulsion to hire people and people cannot, in general, claim that they have a right to be hired by a specific small business. This would, of course, show that the small business owner was acting within his rights.

However, it seems plausible to accept that a person can be acting within his/her rights, yet still be acting in a way that is morally dubious or even wrong. Using the job scenario, imagine that I am a small business owner and I was going to hire the very qualified Sally, an out of work mother of two whose husband was killed in Afghanistan. But, after seeing Brookstone’s blog I decide that I will not hire Sally as an act of protest. While Sally has no right to the job and I have the right not to hire her, I would seem to be acting wrongly-after all, I could help her in her time of need and I have elected to not do so on the basis of what seems to be an insufficient reason. After all, I was otherwise going to hire her and had good reasons for doing so.

An obvious reply is that the act of protest is a morally acceptable action even if it might cause harm. To use the obvious analogy, when workers go on strike, they can harm the business. To use another analogy, when people boycotted businesses for being racist, they could harm the business by denying them income and causing bad press. The people who worked for such a business, who might be innocent of wrongdoing, would also be harmed. However, strikes and boycotts seem to be morally acceptable and hence not hiring people would also seem to be an acceptable form of protest.

While this is a reasonable point, the morality of a strike or protest seems to hinge on whether the cause of the strike, boycott or protest warrants the harm that might be done to the target and innocent bystanders. If workers are going on strike because the company’s safety policies have resulted in needless deaths, then the strike would seem reasonable. If workers went on strike for something trivial or based on some grievance that was not even real, then that would seem to be an unjust strike.

If a boycott were put in place because a store had racist policies, then that would seem to be morally correct. However, if people boycotted a store and urged a boycott because the owner was Christian or on the basis of some untrue claim, then the boycott would seem to be morally wrong because harm would be inflicted on not justifiable basis.

In the case of the Brookstone “protest” the justification for not hiring people is that the protest is against a war on the country and business by Democrats. However, while the Democrats might be doing some things that Brookstone and others do not like, the burden of proof seems to be on them to show that they are engaged in a war on business and America and that this protest is justified as a means of protesting. Otherwise, Brookstone’s call could harm people needlessly and senselessly.

For Brookstone to claim that there is a war on business seems rather like hearing a morbidly obese person screaming that someone is waging a war on his food and his eating and thus he must call on grocery stores and restaurants to stop selling food to the thin people who are making war on him. His enormous girth shows his allegations are a lie, just as the state of business shows the allegations of the war on business to be untrue.

One might suspect that this “protest” is actually an attempt to damage the economy more in the hopes of lowering the chances of Obama being re-elected. If so, this seems rather wicked.

Small business Mike, small business. Can you possibly think that there was a line in the sand in 08 at which businesses arbitrarily stopped hiring or massively reduced hiring? They stopped hiring because revenue dropped.

Did Greece collapse because of conservative or liberal economic ideals?

“Revenue dropped” in ’08. Unemployment in US began increasing in 2000. Presumably small business began reducing hiring at that point.? The Google Public Data Explorer shows unemployment at 3.9% in 2000. 6% in 2003. 4.5% in ’06. Up from there to 7.3% in Dec ’08

The US government is currently the largest health insurer in America through medicare, medicaid, VA and TRICARE. And then we can think about people employed by state, county and city governments. I guess we may as well excise medical care from the economy at this point.

One problem is that people are able to get better rates by getting health care in a group. When people work jobs that don’t have health insurance, they usually have to do without (as I did for a couple years) or buy their own at a higher rate. While small business might be better off, this would mean that more people would be uninsured and thus less likely to get preventative care, more likely to go to the emergency room, and be living with the risk of being wiped out by one serious illness or injury. For example, when I tore my quad I had insurance, so my cost was about $450 for the surgery. If I did not have insurance, it would have been $11,000. This does not include the PT. I also get sick days and I have job security, so I was not let go.

What would really help would be a concerted effort to lower medical costs so people would not need to spend so much (this would include business people). Many savings can be had fairly easily and would also improve patient survival (like washing before surgery).

Insurance companies can bargain with health care providers to get the lowest possible prices. Therefore, if you are treated for an injury, the health insurance company is actually charged less than you would be charged you if you had no insurance.

I did some research on medical costs yesterday and found some interesting things. I’m quite familiar with the medical system; I’ve had 5 knee surgeries after tearing both ACLs playing football.

A few things of note. I read a blog by a medical physician to get his opinion on why medical costs are so high and have been rising. His opinion was that it was primarily a result of choice of the patient. In other words, people are choosing more expensive procedures and equipment. Some of this is the result of marketing. Also, he said that when people have insurance, they tend to choose the most expensive thing that insurance will cover, even if it doesn’t do a better job. Also, people would choose prescription medication instead of over the counter meds because insurance paid for the prescriptions. If people are constantly choosing more expensive procedures, it seems this would inevitably result in higher insurance premiums. In other words, it seems that health care is no more expensive than it ever was, it’s just that when studies are done showing people are paying more, it’s the people themselves that are choosing to pay more because most of them have insurance.

My first two knee surgeries were covered by Medicaid because I was a college student. I paid for my others. I can’t remember the exact amount, but I think the total was somewhere in the range of $10,000, total. The hospital allowed me to pay in very small installments; some months I only paid 5$, but I kept paying and eventually paid the bill in its entirety. This got me to thinking: Since we know that insurance companies are profit driven like other companies, they know that in all likelihood, most people will pay more to their insurance companies than the insurance companies will ever pay for medical bills. If the hospital allows me to make smaller payments than an insurance company does each month, why do I have insurance? And here’s the key: With insurance, I’m paying to make sure two businesses make a profit–the hospital and the insurance company. If I have no insurance, I’m only paying the hospital and they always seemed easier to work with than any insurance company. When I worked for the police department in Bangor, I was astounded at how much the city paid in insurance costs for each officer. I paid a small percentage of the total cost. The insurance companies were making huge amounts of money, something I have no problem with except that I think much of the profit is driven by hysteria. Maybe those companies create some of the hysteria to sell their product, I’m not sure. The problem with having no insurance is that the uninsured must pay prices determined by the majority of people who have some sort of medical coverage. The market is completely distorted.

I’d also like to point out that in almost all my interactions with the medical system, I had no idea what I was going to be paying when everything was said and done. I didn’t really know what my insurance would cover. Sometimes I walked out amazed at how little I had to pay, and other times I was surprised that I had to pay a large chuck of money. I think that someone should sit down with people going in to have surgery and go over each cost, line by line, just like they’re buying a car.

The reason I started looking at medical costs was because I’ve always wondered why medical costs would rise more than other costs within the economy. Medical costs should be controlled by supply and demand, just like the costs, of say, roller skates. I believe that medical costs are artificially inflated because of insurance. People buy products that they have only minimal demand for simply because they can. Medical companies and hospitals can soak the insurance companies, who have near bottomless pockets, and the cost gets back to the consumer, even those that don’t try to game the system. To tell the truth, since we have mixed our economy to the point where we actually have damaged the natural process of determining value, we may be better off just allowing the government to fix prices within the medical field. Of course, this greases the already slippery slope of centralized control.

Very good insight into insurance companies and hospitals. From my own experience, I’d add that when I had my first seizure, I had a body of tests that, when they were completed, turned out to be quite expensive. At the time I was more interested in finding out what my problem was than rolling back and forth between insurance company and hospital to see where I could get the best bargain. My neurologist prescribed a drug, Tegretol, to control the seizures. I was allergic to it. He prescribed another, Dilantin. I was allergic to it. He prescribed another, Mysoline. It made me suicidal. He prescribed another that I handled well, but it was taken off the market soon after I started taking it. Then he prescribed Depakote. It worked, and I’ve been taking it for nearly 20 years. Depakote is expensive. If I didn’t have insurance, I’d be up the proverbial financial creek without a paddle.
About five years ago I arose from my living room couch, and sank to my knees. My wife said I was gray and my skin was clammy. I went through an array of expensive tests, including a catherization, which discovered that I have a leaky aortic valve. My yearly specialist visits with more tests and drug bills are expensive. I’m happy I have insurance.
(Some,few, many ,all, most) people do get more tests and take more pills than necessary. I’m not one of them, and I’m pretty certain that the people I see and talk to in the specialist’s offices aren’t among them.

For many people, the time to go to a physician is not a time to bargain or shop around. Even second opinions are not that easy to get, though you’d think they would be in today’s computerized world. Let me tell you sometime about my retinal tear repair, the very fine ophthalmologist at a major hospital about two hundred miles away who performed the operation ,and how my much more conveniently located personal opthalmologist’s request for ^my^ records were refused–even though I signed a release.

@magus – The insurance/medical market is warped by the separation of the consumer (patient) from responsibility for costs AND choice of the insurance options via the employer-backed plans. The medical costs are even further warped in a similar manner by the separation of the consumer and the decisions regarding cost/benefit of the medical procedure. Medical costs and medical insurance costs did not get this far out of control until people started to surrender their choice of health insurance to their employers. Insert libertarian Ben Franklin quote about liberty/tyranny here. FWIU, much of this was driven by union contracts, beginning in the post-war period, which began to reach critical mass in the 70s after the majority of non-union employers were forced to follow along. It’s been a spiraling up of costs since then, as the choice (intelligence) has been sapped out of the market.

If you study design, one theme that frequently arises is do not join two things together that have nothing to do with each other. Keep your interfaces minimal and simple. Joining medical insurance with employment has been a major mistake.

You do have a a good point. We are essentially assigned an insurance company. A while back we had a computer/data company get our insurance contract, although they had apparently just gotten into the business. It was a disaster and none of us would have individually gone with that company. I vaguely recall that the company collapsed or got out of the business and then we were back with BC/BS. However, there is a lot to be said about being able to shop around. In some cases, such as dental, we can do this,

Makes sense. Employers have no control over what auto insurance people buy or what food they eat, there’s no reason for them to influence health insurance. Seems to work out worse for both ends; the employer and worker.

Good comparison-we should be able to buy our health insurance in the same way. There seems to be little reason why it could not work this way. While I do think car insurance is a bit too pricy, at least I can shop around for better deals, my behavior actually impacts my rates, and I don’t have to belong to a large group to get a decent price.

The high cost of health care is driven upward at every stage of the health care process. Insurance companies are a big problem. Pharmaceutical companies are also a big problem.# And not all hospitals can afford to be forgiving with patient payments. Physicians’ fees and practices add their own drag. For ex. some physicians don’t need the threat of malpractice insurance to be cautious with a patient’s welfare. Thus, some physicians order more and occasionally more expensive tests than other docs do.

# Some would argue that government requirements for drug testing add to the great expense. However, there are for instance, distinct differences between Depakote and its generic versions. Not all versions of Depakote are taken into the system at the same rate or with the same effectiveness.

This seems to be a decision on the part of the insurance companies, unless there are laws that force them to charge “lone” individuals more than people who belong to groups.

Interestingly, treating the entire United States population as an insurance pool makes quite a bit of sense by distributing risk over a large population and enabling a significant pooling of resources. Of course, mathematics might reveal a more optimal population in terms of risk and benefits, etc.

However, I do agree that small businesses and individuals should not be penalized by higher costs just because they are not a big organization.

@TJ – “Of course the government enables all of this by making employer-covered medical insurance tax free.” – Biiiiiig part of the problem. This is business cozying up to government and vice-verse. I’d like to hear some rational explanation for this. This problem flies way under the radar. I thought Health Savings Accounts were at least a very good start on this, yet there’s some big bureaucratic barrier that I also don’t understand as to who can get one and who can’t. As someone who looks forward to buying my own health insurance some time soon, I’d like to hear why this is.

One thing that has not been mentioned in this thread, although it has been mentioned elsewhere, is expensive and unnecessary tests. A couple years ago, my insurance (a combination of Medicare and Medigap) paid approximately $3000 for unnecessary tests and procedures ordered by my medical care provider, a nurse practitioner.

The practitioner had, quite reasonably, prescribed an antibiotic for a bladder infection. I had very unpleasant reactions to it so, quite reasonably, she changed my medication. One of the side effects was a persistent moderate headache, which was a possible known side effect of that antibiotic. Quite unnecessarily, to alleviate the headache (which was not severe) she gave me an injection and put me on oxygen for half an hour. Then she sent me for an MRI of my brain to see whether some abnormality was causing the headache; no problem was found, but the MRI cost about $2,500. Next, she had a doppler scan done on my carotid arteries to see whether my brain was getting enough blood. That expensive test also found no problems.

Obviously unnecessary tests and procedures like the above run up insurance costs, probably very significantly. It is almost impossible for patients to decline such tests and procedures since doing so could brand him as uncoöperative. It would seem that part of the answer to reducing medical costs would be to eliminate, to the extent possible, unnecessary tests and procedures.

Insurance companies are also part of the problem. I own a car and two motorcycles. Obviously I cannot operate all three vehicles simultaneously, but that fact is not adequately reflected in how much I pay for liability insurance. When people or families own more vehicles than they can drive simultaneously, insurance companies make out like bandits. Obviously the insurance companies have to charge adequately to cover theft and vandalism, but owning more vehicles than can be driven simultaneously does not increase the risk of having an accident. Although this does not relate directly to health insurance, it does indicate the willingness of insurance companies to over-charge. They all do it to some degree as can be verified by shopping around; there is no way to avoid paying the excessive premiums.

First, why does the nurse practitioner prescribe tests that you feel unnecessary? Should you refuse the tests despite being labeled “uncooperative”? Who would do such labeling, and why should it matter, if you would, say, sign a document absolving the physician of any responsibility for harm resulting from tests not administered? What role does the whole ‘malpractice insurance’ issue play in her decisions? Does government regulation play any role at all here?

Second, is the insurance company responsible for your multiple insurance costs, or is the federal government? In other words, are there state and/or federal regulations, and it seems to me there are, on what must be insured and to what level? If there are, are insurance companies merely making whatever they can of it? And to relate the subject back to health insurance costs, do you wear a helmet when riding your motorcycle?

And I’m sure I’ve missed some important questions here. These are complicated issues that the pols have tried way too hard to simplify.

@FRE – Well another thing that has not been mentioned in this thread (perhaps I missed it) is the influence of lawyers in this whole equation. Sure there are lots of unnecessary tests. But if a doctor fails to perform a test and it turns out that the test just maybe, might have, 1 in 1 gazillion chance of revealing a problem that may or may not have been treatable, the lawyers will sue. This is a major problem. The usual lefty story line is that the cost of lawsuits themselves are not significant. But this fear of lawsuits is. And it’s not just the doctors themselves making these decisions. The malpractice insurance industry also has its say.

The lawyers always have the benefit of 20/20 hindsight. The doctors have all the risk.

As for “Obviously the insurance companies have to charge adequately to cover theft and vandalism, but owning more vehicles than can be driven simultaneously does not increase the risk of having an accident. ” – perhaps you need to shop around for insurance? I know I get a discount on our second vehicle.

“What role does the whole ‘malpractice insurance’ issue play in her decisions?” 5:07

Thanks for the answer WTP.
Inconsistencies, state to state of caps on what a patient whose life has been altered forever or even ended by a doctor who should never have been board certified is another factor. As you, yourself, have pointed out many times, years of education do not provide absolute proof of expertise–in any profession. Perhaps the AMA needs to improve its training requirements. And ,of course, since we’d likely be working at the lower financial margins of reparations, careful determination of what human pain and suffering would be would be necessary and very difficult Too bad Jobs died before he could put his creative heft behind creating a palm-size “P&S-o-meter” Oops. That would likely be an “iP&S-o-meter”.

“The doctors have all the risk.”
Having been a patient often enough, I can say the patient shares plenty of the physical, financial, and emotional risk.

3.9% in ’00. Never looked back from there. Never hit that Jan ’01 mark of 4.2 again. By 2007 it climbed on from 4.6. Up to 7.3 by Dec. ’08
“Pretty stable” is not a steady climb from 4 to 5 by 2007 and 7-7.3 by the end of ’08. Recession anyone? And it’s dropped from early ’09 levels.

One of the things I noticed is that people were very clever about starting businesses. It was easier to start a business in Fiji than it is in the U.S., so I don’t doubt that it is easier to start a business in Rwanda than it is in the U.S.

In Fiji, anyone can start a business of making roti parcels for lunches and selling them at schools and businesses during the lunch hour. Some people set up barbecue stands to make money. A woman who is good at sewing can, if she can manage to get a sewing machine, set up a business in her home. Venders sell juice at farmers’ markets. People go fishing and sell fish at stands along the road. So, you can easily see why it is easier to start a business in a third-world country, such as Rwanda or Fiji, than it is in the U.S. However, there is a down side.

The Lautoka, Fiji, city council found that much of the juice sold at the farmers’ market was contaminated with e coli. The fish sold at stands along the road often causes illness and sometime even death. The frozen food in supermarkets is not always frozen. Here in the U.S., for good reasons, we have regulations to protect the public and often these regulations do make it more difficult to start a business.

To understand even better why we have regulations, I suggest studying what business was like during the gilded age and before. Regulations were put into place in response to public pressure resulting from abuses and predatory business practices. For example, thousands of people were killed by steamboat boiler explosions, which were quite common; a boiler explosion is one of the most disastrous industrial accidents. There was public pressure to establish safety regulations, but Congress debated for years whether it had the legal authority to do so and states couldn’t to much since riverboats constantly crossed state lines. Finally, Congress did act in the interest of public safety.

Of course there are unreasonable regulations. However, if we suspended many regulations, people would quickly find out why they existed.

Interestingly, it has been claimed that Obama is very chummy with certain monied folks. If those claims are true, perhaps the other folks are out to get Obama because he is not friendly to their business.

Even if Obama was business friendly (which he seems to be-look at the glowing economic facts about the big companies) he might still be regarded by some as not being friendly enough to what they want to do. For example, Obama would not eliminate the EPA and is willing to regulate business. He is wise to do so-just as we need criminal laws and police to restrain run of the mill criminals, we also need laws and regulators to deter and restrain those who would commit harms via their economic activities. After all, one main reason we need government is that people are willing to do wicked things and must be deterred by force and threat of force.

This is a blog post from my friend Royce, a former Army captain with a degree in mathematics and geology. He is a business man and has a solid grasp of economics:

One quote in particular struck me: “Furthermore Socialism as a governmental form is far from successful as can be seen in the current upheavals in Greece, Italy, France, and across Western Europe in general. The fatal flaw in these political philosophies is that their objective is employment not efficiency and wealth redistribution not wealth creation.”

The upheavals are, in large part, caused by the financial mess that was brought about by the folks the Occupiers are protesting against. True, Greece and Italy run their economies very poorly but this seems to be a general failure of their government (and people) rather than something that can be simplistically attributed to the demon socialism.

“Ben May, Greek economist at think tank Capital Economics, said: “Their mistake was to go out, borrow money and use it to fund huge wage growth, rather than pay down its already substantial debts.”

“Greece went on a spending spree, allowing public sector workers’ wages to nearly double over the last decade, while it continued to fund one of the most generous pension systems in the world. Workers when they come to retire usually receive a pension equating to 92 per cent of their pre-retirement salary. As Greece has one of the fastest ageing populations in Europe, the bill to fund these pensions kept on mounting.”

I would not blame socialism for the problems of Greece anymore than I would blame capitalism for our collapse. After all, these are broad theories/ideologies rather than specific actions and policies.

I am, of course, open to the idea that a general system might have inherent flaws. Marx, of course, argued that capitalism contained the seeds of its own destruction. If that is possible, it would seem that it is also possible that socialism also contains inherent, self-destructive defects. What would be needed would be an in depth examination of various economies to sort out the causes of the problems. For example, did a nation’s economy tank because the government owned some industries or because the government officials running the show made decisions that wrecked the economy? This, not surprisingly, ties nicely back into the old battle of whether or not the private sector is inherently more competent than the public sector or whether it simply depends on who is making the decisions, etc.

Why are you constantly quoting/referencing Marx? Is he the only economic theorist you know? Even given significant bias, one would expect a little more Smith, von Mises, Hayek, etc. would leach its way through.

“Marx, of course, argued that capitalism contained the seeds of its own destruction.”

How many seeds of destruction has Marxism planted? Where are the utopian workers’ paradises? I guess they got swallowed up in Lenin’s purges. Or maybe Mao’s or Stalin’s. Or maybe they didn’t read Marx and had no idea what real Marxism was.

Stalin was hardly a Marxist in the philosophical sense. Mao and Stalin, I would contend, used a convenient ideology to “justify” their evil. However, I would say that they did borrow some from the philosophy-but they clearly did not read it closely: Marx argued that a state would have to go through a capitalist stage before reaching socialism (the incredibly productivity as well as the class creating aspects of capitalism were necessary conditions).

“The upheavals are, in large part, caused by the financial mess that was brought about by the folks the Occupiers are protesting against.

Just read this again. Does any one else on here actually agree with Mike’s statement? I find it absolutely and provably false. See my comments below. No elite 1% were stealing Greece’s money–every Greek citizen was stealing Greece’s money.

Retract that statemen; for once, Mike, admit you’re wrong. It’ll go a long way and reestablishing your credibility on economic matters, and perhaps healing the wound created so long ago when you first read Das Kapital.

I am not denying that the Greek officials and citizens made poor choices and shot their wounded economy repeatedly in the face. However, the world economy was severely damaged by the folks the Occupiers are protesting against which had a significant impact on the situation.

As you note, the Greeks (and Italians) cannot sustain their economies. I would not be inclined to say that socialism made them fail. Rather, it was their poor economic choices that made things fail,

Doh! Their poor economic choices were based on socialism, or at the very least, market ignorant economics. Above you compare the problems of socialism with ours. You have no idea what you are talking about. It’s like comparing a cold with pneumonia or tuberculosis. Absurd.

“Look, I think that we misunderstand when we talk about the Greek crisis or even about the Euro crisis. What you’re going through is a crisis that is the aftershock of the original 2008 meltdown on Wall Street. What happened over the last 30 years was not just a question of some kind of change in the way that the Greeks finance their government or the creation of the Euro Zone. It was that American capital, which is the largest base of capital in the world, was systematically deregulated. And power to make decisions that should’ve been in the hands of regulators were left to the banks themselves. And so what’s happened is that you’ve got American banks being recapitalized by the treasury and by the federal reserve not going back into the business of making loans, but instead taking that recapitalization, turning it over to their trading floors, and for the last two years essentially doing some high volatility trading in commodities and European government bonds. And you cannot allow teenage boys to play with fast cars in an unsupervised environment and not expect crackups.?”

“And so what’s happened is that you’ve got American banks being recapitalized by the treasury and by the federal reserve not going back into the business of making loans, but instead taking that recapitalization, turning it over to their trading floors, and for the last two years essentially doing some high volatility trading in commodities and European government bonds. And you cannot allow teenage boys to play with fast cars in an unsupervised environment and not expect crackups.”

So apparently Dodd-Frank has done nothing to fix the problem, right dhammett?

TJ. Before I get to your deflection on to Dodd-Frank (in effect for about a year now), let me point out that the point of the quote was that there is indeed a connection between Greece and Wall Street in some minds (perhaps not yours’ and Magus’).
Mike wrote “The upheavals are, in large part, caused by the financial mess that was brought about by the folks the Occupiers are protesting against.”
Magus replied: “Just read this again. Does any one else on here actually agree with Mike’s statement? I find it absolutely and provably false.”
Point of the quote I provided was that there is indeed a connection between Greece and Wall Street in some minds (perhaps not your mind and Magus’).

In the article:”What you’re going through is a crisis that is the aftershock of the original 2008 meltdown on Wall Street.”

Now to the deflection:We’ve been able to observe what government can and can’t do for years, haven’t we? That Dodd-Frank hasn’t in one-year-and-a-couple-months-or-so solved massive problems half way around the world, problems that followed soon after the melt down that resulted from Wall Street’s creative tinkering and scandalous ratings practices is no surprise to you, is it?.

“And you cannot allow teenage boys to play with fast cars in an unsupervised environment and not expect crackups.”

What the quote seems to say quite clearly is that the environment is “unsupervised”. Apparently Dodd-Frank (which I don’t believe was ever expected to be a cure-all, considering the sausage-grinder process it went through to be passed) doesn’t provide enough effective regulation of the “teenage boys” and their “fast cars”.
We regulate driving quite heavily.http://www.huffingtonpost.com/2010/10/21/car-accidents-involving-t_n_771727.html
“Far fewer people are dying in car crashes with teens at the wheel, but it’s not because teenagers are driving more cautiously. Experts say laws are tougher, and cars and highways are safer”

If the analogy is carried over to Wall Street and the stock market we might wonder why some people are opposed to even more regulation there. Why the complex activities that precipitated the crash are allowed to continue at all. Rather than supervise (regulate them), we should prohibit them entirely–much like constructing a car with more air bags and and a stronger chassis. You can demand seat belts be worn, but people still ignore them. But passive restraints work. I’m sure a person can go out and find something other than a clunker out there that has no passive protection, and he’s welcome to it. But the vast majority of people shouldn’t have to even have to give such intelligent, common-sense devices a choice. They should be required. And they are.

Are we discounting the mom and pop stores in trouble because of chain stores? How many m&p department stores and grocery stores struggle and fail because a Wal Mart opens up down the road? Those corner gas stations (that likely sell big corp gas by one name or another) are struggling or failing because chain convenience stores open up all around them dispensing gas, coffee, sandwiches, and Twinkies? How many local restaurants have failed because of Darden? Survival of the fittest.

True-one of the main factors in the failure of small businesses has been large businesses. There is only so much cake to go around, so if Wal Mart gets a bigger slice, then Pop Mart gets a smaller slice. Amazon, which I must admit that I use, also has had an impact on its competition. I am not, however, claiming that these companies are thus wicked for taking out Mom & Pop.

Before cars became common, it would have been inconvenient to shop at large supermarkets, so much grocery shopping was done at small neighborhood stores and people bought food in small quantities because of the difficulty of carrying large quantities. When cars became more common and most families had at least one car, it became convenient to travel longer distances to shop. And, large stores could sell goods at lower prices than small stores, so neighborhood stores began to fail in the early 1950s and were pretty much a thing of the past by1960. They could not compete with the large supermarkets to which it became convenient to drive. The change to “cash and carry” from having a store employee behind the counter pick up the goods at the request of the customer greatly reduced personnel requirements in super markets.

The situation is somewhat different with gas stations, but similar. Small ones in general met their demise a bit latter than grocery supermarkets.

How many of those m&p places of yesteryear could meet today’s regulatory standards? It’s much more complicated than you understand. An acquaintance of mine coordinates the various permitting and such that major restaurant chains need to work through to put in new locations. The bigger the city, the closer to the city, the greater the regulation and permitting hassles. It has reached a point where it actually requires someone with an engineering degree AND the knowledge of how to schmooze the political/regulatory structure in order to get a restaurant up and running. The m&p’s that currently exist are mostly grandfathered in or those who have connections. New m&p’s need to have significant bank behind them to overcome the significant overhead which bigger organizations can spread across multiple installations. Without the excessive regulation, and it’s really more the bureaucratic waste and in many cases malfeasance, the playing field would be much more level. What has happened to level the field in some cases, to some degree, is that smaller venture capital firms step in to play that role. But they need their cut too. And who pays for it all? Taxpayers, new m&p’ers, restaurant patrons, and because of the increased costs resulting in fewer businesses charging higher prices, low skill and entry-level waiters and waitresses.

The situation is somewhat similar with gas stations. Many of the older ones went out of business when the environmental regulation forced large numbers of them out of business. Now some of those did have problems with their tanks, no doubt. But the regulations were written with the influence of the major players in the fuel business, who had the bank to fund over-engineered solutions. Some environmentalists actually work, whether they know it or not, for Big Oil. But Big Oil is not the problem here. Government bureaucracy is. I’ve seen it in many businesses I’ve worked in and with myself. Ivory tower solutions create unintended consequences. They just are not held accountable for them.

It’s true that mom & pop stores were unable to compete with big businesses. But before practically all families had at least one car, mom & pop stores could compete very well with big businesses because of location. It would have been inconvenient for families without a car to travel to a large supermarket then have the problem carrying grocery bags to a bus stop, carrying them on a bus, then having to carry them from a bus stop to the house. Without the ability to carry several bags of groceries, shopping had to be done more frequently which could be done conveniently at mom & pop stores, but not at large distant supermarkets.

So, it was the ubiquity of cars that made it possible for large supermarkets to drive mom & pop stores out of business. Regulation may have been a factor, but it was not the primary factor.

“But Big Oil is not the problem here. Government bureaucracy is.” “Government bureaucracy” is the problem. But to what extent?
Let’s say the government creates a series of specific matters-of-life-and-death regulations for safe food storage and handling. But, to keep the playing field even and to keep oversight costs at a minimum, the law totally exempts small businesses. Only larger businesses need comply. Only large businesses will be inspected. Will mom and pop therefore prosper? Will the large chain restaurants die off because they must meet regulations? Or will the large corporations deal with the regulations, quickly adjust their bottom lines adapt to a wider range of customers and, by providing better quality and safer at lower prices, eventually drive ma and pa out of business?
Ma and Pa were already on the way out for many reasons. Ma and Pa were aging and the kids wanted no part of the business anymore. Or Ma and Pa died without heirs and no one wanted their homey-but-grungy old diner. And the nature of society in general has changed. The older generation bemoans that every day. Over a fifty year period the meaning of the word “neighborhood” has shifted. Reality (through vastly improved transportation and changing family structures) and politics (through gerrymandering, for ex) has created a huge shift that Ma and Pa couldn’t keep up with. The public simply gravitated toward something better. If we believe in the free market, the winners are winning and the losers are losing. More and more every day. And regulation is the least of the losers’ worries.
Government bureaucracy is A problem.

Good points. In many ways, it is the free market that has been reducing the Mom and Pop businesses. After all, large companies can compete more effectively in many areas than can a small business. One might also suspect that the big corporations have had some small lobbying hand in the laws that favor them.

Small businesses can still compete in some areas (restaurants and specialty businesses) but some areas have been almost complete lost to the big guys.

“In many ways, it is the free market that has been reducing the Mom and Pop businesses. ” – Aaannnd, we’re back…Consumers don’t exist to give Mom and Pop a job. Mom and Pop (and Big Business) exist to meet the needs of the consumer. So long as the playing field is level (see my post about M&Ps elsewhere concerning regulation and its costs) each will meet what the market (consumer) demands/needs.

But the field is not level. Compare, for example, the political influence of Mom and Pop with the big companies. Naturally, it can argued that is part of the “free” market-if M&P wanted to stay in business, they should have gotten some big money lobbyists to get the laws written to favor them, etc.

Eliminate the stupid regulations. That will level the playing field. That’s my point. The excessive regulations are what warp the playing field. I don’t care if M&P or Big Bidness do my bidding. Whichever one is more efficient, provides the best service at the lowest price should survive, not based on some romantic ideal of Mom and Pop…or more likely, Sirajul and Mujibar. In the cycle of business, people will over time favor one or the other. De-emphasizing regulation enhances the market choices.

Excerpt from The Big Ripoff: How Big Business and Big Government Steal Your Money, by Timothy P. Carney

If regulation is costly, why would big business favor it? Precisely because it is costly.

Regulation adds to the basic cost of doing business, thus heightening barriers to entry and reducing the number of competitors. Thinning out the competition allows surviving firms to charge higher prices to customers and demand lower prices from suppliers. Overall regulation adds to overhead and is a net boon to those who can afford it — big business.

Put another way, regulation can stultify the market. If you’re already at the top, stultification is better than the robust dynamism of the free market. And according to Nobel Laureate economist Milton Friedman:

The great virtue of free enterprise is that it forces existing businesses to meet the test of the market continuously, to produce products that meet consumer demands at lowest cost, or else be driven from the market. It is a profit-and-loss system. Naturally, existing businesses prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.

There is an additional systemic reason why regulation will help big business. Congress passes the laws that order new regulations, and executive branch agencies actually construct the regulations. The politicians and government lawyers who write these rules rarely do so without input. Often the rule makers ask for advice and information from labor unions, consumer groups, environmental groups, and industry itself. Among industry the stakeholders (beltway parlance to describe affected parties) who have the most input are those who can hire the most effective and most connective lobbyists. You can guess this isn’t Mom and Pop.

I’m not for simply increasing regulation. Rather, I look at regulation the same way I look at the rules on my syllabus: ideally the rules should be as few as possible and they should be aimed primarily at preventing problems. Likewise for business: the regulations should mainly be to prevent businesses from harming people (including employees).

The problem is, and likely will always be, determining which regs are useful and which are not. The ridiculous regulations and the most worthwhile regulations are the low hanging rotten and perfectly ripe apples on the ideological regulation tree. Only liberal and conservative fools would disagree on those.

It’s the regs higher up that are the sticking points. A lot of workplace safety issues and sanitation requirements and means of measuring adherence to same fall in that category, for example. Yet many of those regs–you and I would likely disagree on many–would need to be approved somehow. By whom? A “bipartisan commission”? A “non-partisan taskforce”? Citizens– through a never-ending torrent of state and national referendums/referenda/referen-duh?

The other problem, TJ, is that any system can be gamed. It doesn’t matter how many rules you put in place, people can find loopholes. Eventually you get a system like the US Army has where the rules are absurd, contradictory, and take priority over what everybody agrees is really important. More of my day is spent worrying about bureaucracy and making sure I’m up to date on all my PC training than what it takes to win wars. Oh, and making sure I’m wearing my reflective belt when I’m in my physical training uniform.

“Any system can be gamed” Yes, as I’ve written many times before, that’s true. It’s true of our legal system, for example. We’re obviously not going to eliminate our courts. Are we? There are voices out there that seem to indicate a wish to do so. So perhaps we could reform the system. But guess what? We end up with another set of rules, which can be gamed, if what magus writes is true.
I’d rather have a system that can be gamed than no system at all. Just me.

Suggest eliminating only the stupid regulations, as WTP did and you get my response at 10:24, 10:07 suggesting that doing so, while very difficult, could possibly be achieved by reasonable men.
TJ’s response: “Except that regulations are almost never thinned; they grow like kudzu.” I assume he means regulations, good or bad.

There’s no denying the very pessimistic truths that “any system can be gamed” and that “regulations are almost never thinned; they grow like kudzu”. Humans are involved, so there’s nothing surprising (or avoidable) there.

The appraoaches ,however, would seem to be few: 1/Keep on bitchin’ for the sake of bitchin’ 2/ Keep bitchin’ with a sensible, achievable purpose—seeking changes in the small stuff–like tort reform–and the big stuff like any piece of the entire health care system from GP to specialist to hospital to insurance company to pharmaceutical company to medical equipment company. . . 3/Overthrow the government in favor of a regulation-free anarchy
If I’ve missed any possibilities, feel free to add them. Just don’t bitch.

True-all systems can be gamed. After all, they will not be perfect. But this seems to be a false dilemma (perfectionist fallacy) sort of reply-in that it seems to set a requirement unreasonably high as a means of rejecting or dismissing something.

There are clearly better and worse systems. As such, I do not ask for no system, but for a better system. That seems reasonable and possible. We just need some innovators to work on this-maybe we can lure some folks away from creating the next magical financial instrument or bubble long enough to work on this. 🙂

PRINCETON, NJ — Small-business owners in the United States are most likely to say complying with government regulations (22%) is the most important problem facing them today, followed by consumer confidence in the economy (15%) and lack of consumer demand (12%).

Rounding out small-business owners’ top five problems in the Oct. 3-6 Wells Fargo/Gallup Small Business Index poll is lack of credit at 10% and poor leadership by government and the president at 9%.

Looking ahead to 2012, approximately one in three small-business owners say they are very or moderately worried about going out of business. About the same number are worried about not being able to compete with large or global competitors, not being able to hire the number of employees they need, and not being able to pay their employees. Thirty percent worry they will have to reduce their number of employees.

Does that Gallup Poll or any other source tell us what percentage of the regulations the small businesses are having trouble complying with are the unnecessary ones. Almost everyone on here has admitted the real need for certain regulations–likely concerning safety, or work place conditions. . . If those are the kinds of regulations the small business owners are complaining about, I’d rather frequent one of the other 78% who don’t see it as the major problem. And—I didn’t look at your poll, but apparently you did. . .The figures you provide add up to about 67% What gripes are contained in the remaining 23%?

Sounds like small businesses are dealing with pretty complicated issues here. I suspect even if you and I and Magus and WTP could wave a magic wand and lift all regulations, good and bad, they’d continue bitching until we paved their paths to success with roses.

Actually I do-I do my part by doing positive things and avoiding doing harm to others. I would run for office, but I already have a role to play. But, if people call for me to enter public service, I suppose I would have to heed that call. 🙂

WTP:
“As such, I do not ask for no system, but for a better system. ” – Then go create one. Show us all how it’s done. Go out in the world and DO. But don’t go asking the rest of us to support it. Seems like a brief extension of the last paragraphs of my Oct 25 8:43 am post.

Seems anyone on here who’s bitching about the current system is asking either for a better system than the current system, a worse system, or no system at all. We’re pretty sure there’s no such thing as a perfect system. I doubt anyone wants a worse system. And everyone flatly denies any interest in anarchy.

You’ve come down on the side of regulations as needed, flatly disclaiming any desire to eliminate regulations altogether. I’ve pointed out some of the difficulties with determining what the needed regs would be, but I’ve offered up plenty of examples that any sane person who’s pro or anti-regulation would grudgingly admit society needs in my posts on here. I’ve also pointed out the difficulty of gathering reasonable men who will decide on additional regulations that many sane–but not necessarily totally reasonable–men may object to for blindly ideological reasons.

We’ve got too many regulations. Check. Some of those are absolutely necessary. Check. But others are of debatable necessity—debatable in the sense that many, many people demand them and many, many people oppose them. I believe it would be foolish to “streamline” the system to the point where we eliminate all of those rules. We may disagree there, but somehow I doubt it. So likely, we agree that the one thing we must do is eliminate regulatory excess.

In the end, then, when you and I and TJ and Magus get together and do something more than bitching about the current system and whether the responsibility for the failure of same lands on the conservative or liberal side of the ledger, we’re still in the same leaky boat.

We’re talking about a system here. Working with other people to accomplish an OBJECTIVE task. Make that system work with the rules that you think are superior to the ones most businesses use. Being kind to children and small animals is something I’m sure even Bernie Madoff was capable of. In fact, I know of several hospitals and such that were funded with money from Madoff and his cronies. The problem was, it wasn’t sustainable. But these are things you will argue without understanding because you don’t understand where wealth comes from.

You regularly claim that I do not understand where wealth comes. I presume this means that you are saying that I am wrong. This would seem to suggest that you know not only that I am wrong but that you might have some idea as to what is the correct view. If you would, spell out the flaws you see in my view (such as how modifying natural resources or inventing new things/ideas can create value) and present to us, for our enlightenment, the true tale of where wealth comes from.

Good-cop TJ, Bad-cop me, and Cop-cop Magus have all pointed out where you don’t understand where wealth comes from. I don’t know what more could be said. Do you agree with my analysis at this link or do you not? Are not all parties in that scenario, one way or another, wealthier? If not, who lost and did that loss balance out the wins?

So, that is all there is to creating wealth? So, if I took a Popsicle stick and got some foolish person to pay me $50 for it, I would have created wealth? What if I get the state to print me money and give it to me? Am I creating wealth? Just curious as to how this works.

The philosopher who refuses to think. You did not make a serious effort to understand what I said there, nor did you answer my questions.

Mike, is there an economics department there at FAMU? Perhaps you need to talk to one of them. This is truly astounding. Mike, even the Keynesians are in agreement on wealth creation. I’m sure you could even find a few Marxists who get this. You just don’t want to try. This is truly sad. You have no business teaching others how to think if you refuse to think yourself. Certainly not while funded by taxpayers. You are doing a disservice to your students as well.

There is no question that regulations are sometimes excessive and that may well be the case with restaurants in some areas. It may well be that excessive regulation has worked more to the disadvantage of small restaurants than large restaurants. Where regulations are excessive, they should be changed. However, that does not mean that all regulations should be suspended. I’m sure that we all want food handled in such a way as to reduce the likelihood that we will get food poisoning, that food handlers should know how to wash their hands properly, that there shouldn’t be rats, mice, and cockroaches in restaurants, etc. Regulations and regular inspections are necessary to maximize the likelihood that those food safety procedures are followed. It is not possible for restaurant customers to examine restaurants to ensure that they are safe.

At one time (and perhaps still) railroads were over-regulated. The cost per pound of what was transported depended on what was being transported. Here is an egregious example that I have given before.

The cereal, shredded wheat, was previously called shredded wheat biscuits. The manufacture was able to have the freight rate lowered considerably by changing the name from shredded wheat biscuits to shredded wheat because, under regulations, wheat was considered to be an agricultural product whereas biscuits were considered to be a manufactured product. That is only one of many possible examples of over-regulation, and some of the regulations were just plane silly.

Rather than object to all regulations, we need to examine regulations carefully to determine whether they make sense.

“that does not mean that all regulations should be suspended.” – I don’t even have to be half-a-Mike to say, where did I say that? In my reference to gas stations, did I not say that some stations did have problems with their tanks? I do not object to ALL regulations, nor do most conservatives or libertarians. This is a typical straw-man argument whenever criticism of regulation is raised. You’re missing the point. Regulation cannot be the entire solution. An emphasis on educating the consumer would go a much longer way. That’s a whole other issue to discuss and not my focal point here either. I ask you, who regulates the regulators? I have personally seen government waste in the hundreds of thousands, if not millions, based on various forms of phony government oversight.

Something that I find endlessly amusing is my observation that the less people of a certain political bent believe in God, the more faith they have in Government. To me the weaknesses are similar. It’s a fear of the uncertain world and a childish desire to believe that some greater power will take care of them. At least when people believe in God, they have a faith in an abstract ideal. Such has at least a value higher than man’s current state. A faith in Government is simply a faith in the kind of man who works at the post office.

According to the US Small Business Administration, citing the most recent Office of Advocacy and Census data, there are:
• 27.5 million small businesses in the US (of these, about 6 million have employees and 21.4 million are “Solopreneurs” or businesses with no employees);
• 18,311 business with over 500 employees

The historical unemployment rate is about 4-5%, but just to illustrate how important small businesses are to turning around this economy, consider the following extremely “simple math”. With 14 million people unemployed currently, this means that:

• If one out of every two small businesses (50%) hired just ONE person, we would have zero unemployment;
• If each of the 6 million small businesses that has employees hired just two people, we would only have 2 million people unemployed in the US (1.3% unemployment);
• In contrast, business with more than 500 employees would need to hire an average of 655 people each to get to hire the same 12 million employees (i.e., to achieve 2 million people unemployed)

**************************************

To recap, our government should seriously consider policies that will truly impact small business owners, including:
-Creating certainty and confidence through permanence in our tax code
-Lowering tax rates and streamlining the tax codes
-Expanding the definition of an independent contractor so businesses can hire more 1099 workers
-Simplifying and eliminating rules and regulations of note to small businesses
-Create long-term hiring incentives
-Repealing the Affordable Care Act
-Fostering reasonable access to capital for small businesses

The math really is simple, but we need to have the right equation. Small business is the critical input in that equation and it needs our focus and attention.

So who the hell is Melissa Brookstone? Never heard of her and she has no profile on Wikipedia. OTOH, people such as Rosanne Barr, Bill Mahr, etc. etc. etc. call for and/or endorse those who call for actual physical violence up to and including the overthrow of the system the vast majority of Americans support. But when those on the left make these far more outlandish statements, Mike dismisses them as nothing to be taken seriously. Yet an unknown tea party person makes a statement encouraging people to do…well, basically do nothing, Mike’s laser locked and on it like white on rice. Of course, you cover yourself as usual by saying one thing then the other, thus saying effectively nothing. Except that we would have to ignore everything else you’ve written to believe this. There is so much more muddled thinking here that it’s hard to imagine where to go next.

Mike, you make it sound like someone has a moral responsibility to create jobs. Yet you could have hired someone to paint your house. hmmm…

I’m split on that. On the one hand, I think that people should do their own dirty work (like cleaning). My mother’s argument was based on the character building qualities of such activity. It also can give a person a certain perspective on life (not guaranteed, of course). I suspect that I am inclined to not litter and to care for public areas (like parks and my school) because I know that cleaning is no fun and it is wrong to make a mess expecting another person will clean it up.

On the other hand, doing so can provide people with employment and there is the practical point of the value of time. If someone makes, for example, $35 an hour then it could be good sense to hire someone to do work at minimum wage-they would, after all, come out ahead each hour.

I think Barr and Maher fancy themselves comedians and hence I am not inclined to take them seriously. If they did make a serious call for senseless violence, then I would be opposed to that. To be honest, even when I had HBO I couldn’t take more than about 13 seconds of Maher.

No, I did not claim that people are obligated to create jobs. The scenario is that someone was going to hire a person, but has been told not to do so as a protest and thus fails to hire on that basis.

I didn’t claim it was unchangeable-rather that the economic system as a whole is zero sum at a specific moment in time. More cake can be made, but the division is such that economic goods are exclusive goods.

Bill Mahr appears on serious news shows and begged to be taken seriously on his show. You’re splitting hairs when it works for you.

I know you didn’t claim that people were obligate to create jobs. You said:

“after seeing Brookstone’s blog I decide that I will not hire Sally as an act of protest. While Sally has no right to the job and I have the right not to hire her, I would seem to be acting wrongly-after all, I could help her in her time of need and I have elected to not do so on the basis of what seems to be an insufficient reason. After all, I was otherwise going to hire her and had good reasons for doing so.”

And you said:
“If a small business owner elects to not hire people on the basis of Brookstone’s pledge, then they are acting within their moral rights. ”

…Perfectly clear writing. And “moral rights”? Obfuscate much?

“More cake can be made, but the division is such that economic goods are exclusive goods.” – More mucked up linguistic BS. You’re dodging my point at the link to Wealth.

Long list of responses. Might as well just tack this onto the end. This is a good article to view if you want to see in action some of the machinery behind the regulation battles. Not much new, but some interesting takeaways for posters with different views.

“Venture fund executives like Mr. Carusi and lawmakers like Mr. Paulsen insist that they are equally concerned about safety. However, in their view, a big part of the problem at the F.D.A. is philosophical; top officials, these critics say, have overreacted to recent episodes involving flawed products and become risk-averse. As a result, devices are available first in Europe, they say.

“’The key is to strike the right balance,’ said Dr. Josh Makower, a device developer and a consultant to New Enterprise Associates, a venture fund in Palo Alto.”

I’m assuming here that we’re talking about the right balance between no reaction, reasonable reaction, and overreaction. And yes, Dr Makower , that is the key. It’s part of the problem we’ve been discussing on this blog for some time. And the problem, for Mr. Carusi, Mr. Paulsen, and other investors and developers and for the FDA— is “philosophical”. What philosophical means, of course, in this context, is that there are opposing opinions that are very difficult to resolve.

Unfortunately, in the meantime , for the patient, who is so often forgotten in these equations, the failed hip replacement or the failed heart defibrillator is not “philosophical”. It’s not a matter getting a product to market, of cost, or profit. It’s a very concrete, non-philosophical matter of quality of life. . . or death.